What is free cash flow?

Free cash flow (FCF) represents the residual funds that a company retains following the settlement of its operational costs (OpEx) and capital investments (CapEx). A higher free cash flow enables the company to direct resources toward rewarding shareholders through dividends, reducing existing debt, and pursuing avenues for expansion and development. This surplus capital, indicative of a company’s financial health, plays a pivotal role in fostering sustained growth and facilitating strategic decisions to bolster long-term stability and competitiveness.